Texas Job Growth Triples the Nation's as Mortgage Rates Top 7%

Texas keeps outhiring the country, but a 7% mortgage rate and a Fed hike test how long the gap can hold.

October 14, 2026

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Texas Job Growth Triples the Nation’s as Mortgage Rates Top 7%

Good morning. Texas is still outhiring the rest of the country, by a wide margin. But a 7% mortgage rate and September's Fed hike are starting to test how long that gap can hold.

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Market Snapshot

Top Market

By Transaction Volume

Aransas Pass — $80.8M

Properties Sold

All Asset Types

Transaction Volume

Sales Activity

$173.5M

Top Office Submarket

Avg Starting Rent

Uptown Turtle Creek (DFW)

$111.74 / SF

Texas Office Rent

Avg Effective

$40.53 / SF

Office Rent Growth

YoY Change

-14.5%

*Office metrics courtesy of CompStak; data from 4/1/26 – 6/30/26. Sales metrics courtesy of Actovia; Texas properties reported sold during the week of 9/19/26 – 9/25/26.

Jobs Engine

Texas Keeps Outhiring the Country as Borrowing Costs Climb

Texas payrolls are still growing faster than the nation's, even as mortgage rates push past 7%.

By the numbers: Texas payrolls grew 1.0% year over year in August, more than triple the national pace of about 0.3%, per the Texas Real Estate Research Center. Every large metro except Austin added jobs, and only mining, information and government shed them.

Financing tightens: The average 30-year mortgage rate jumped to 7.03% in September from 6.66%, a 37-basis-point move, as the 10-year Treasury climbed 54 basis points to 5.29%. The mortgage spread narrowed to 174 basis points, back near its typical range.

National drag: Hiring is cooling across the country. September added just 29,000 jobs, and revisions cut July and August by a combined 60,000, nudging unemployment up to 4.2% from 4.1%.

Mixed signals: Dallas Fed surveys showed a softer manufacturing hiring outlook after several months of gains, though the services read improved. TRERC economist Jorge Barro's October outlook ties rising debt to the AI buildout.

➥ THE TAKEAWAY

Why it matters: Texas keeps winning jobs, and that demand underpins apartments and offices across its metros. Pricier debt is the catch. With 7% mortgages and a Fed still leaning hawkish, the cost of financing the space all those workers fill is rising, so the state's edge now rides on whether hiring holds as capital gets dearer.

Around Texas

➥ Hertha Metals broke ground on a $100M iron plant in Conroe, targeting 10,000 metric tons a year of high-purity iron to loosen China’s grip on magnet materials.

➥ Taylor approved a 664-acre technology campus that could scale to 1 gigawatt of power, with developers pledging $28.2M in local commitments and first power by mid-2028.

➥ Developers are reshaping southern Dallas with projects like Hoque Global’s $1B University Hills and a medical anchor recruited to the 1M SF former RedBird Mall.

➥ Buc-ee’s opened a 74,000 SF travel center in San Marcos with 128 fueling positions, its 36th in Texas, adding more than 200 local jobs.

➥ DART is courting redevelopment ideas for a southern Dallas station, aiming to turn transit-owned land into mixed-use density.

➥ The century-old downtown Dallas Neiman Marcus flagship closed Sept. 30 after parent Saks Global’s bankruptcy restructuring, ending a Main Street institution.

Follow the Money

OFFICEDALLAS-FORT WORTH DFW office leasing jumped to 2.52M SF in Q3 from 1.80M with no new deliveries, as Far North Dallas drove 733,000 SF of net move-ins, per CBRE.

HOSPITALITYTEXAS Monty Bennett’s Dallas-based Braemar sold the Ritz-Carlton Sarasota, Hotel Yountville and Bardessono for $437.5M, roughly $1M a key, to fund its split from Ashford.

OFFICERICHARDSON Tesla signed an office lease in Richardson, CoStar reports, deepening its North Texas footprint.

OFFICEHOUSTON O’Melveny & Myers leased 43K SF across two floors at the 43-year-old TC Energy Center, choosing a renovated downtown tower over a new build.

MIXED-USEDALLAS Leland Burk’s $800M Preston Hollow high-rise vote slipped to mid-November as he reworks traffic plans for the 240-foot project.

ENERGYGALVESTON An LNG supplier is pursuing a new Galveston Bay liquefaction facility, ConnectCRE reports.

📈 CHART OF THE WEEK

Austin apartment rents turned slightly positive in September 2026 for the first time since early 2023, reaching 0.11% year-over-year growth after prolonged declines driven by a surge in new supply.